The US government will strengthen its control over giants in the AI (artificial intelligence) industry.
On June 5th local time, according to foreign media reports, two regulatory agencies of the US federal government have reached an agreement to conduct an antitrust investigation into the dominant positions of Microsoft, OpenAI, and Nvidia in the AI industry, symbolizing a significant upgrade in the US government's regulatory efforts on AI technology.
According to insiders, the US Department of Justice and the Federal Trade Commission (FTC) have reached an agreement in the past week, and negotiations have entered the final stage, expected to be completed in the coming days. According to the agreement, the US Department of Justice will take the lead in investigating whether Nvidia's actions violate antitrust laws, while the FTC will take the lead in reviewing OpenAI and investigating Microsoft's investment in OpenAI and reaching agreements with other AI companies.
If the news is true, it means that the US government's regulation of the AI industry is accelerating its upgrade. In fact, the entanglement between US regulatory authorities and large technology companies in the field of AI has been ongoing for some time, and with the rapid development of generative AI technology, this entanglement has become more complex and urgent.
Last July, the FTC publicly issued a civil subpoena to OpenAI, stating that its investigation into ChatGPT focused on whether OpenAI had "engaged in unfair or deceptive behavior related to consumer risk (including reputation damage)," requiring the company to "provide a detailed description of the extent to which measures have been taken to address or mitigate the risk of false, misleading, or defamatory statements about real individuals that may be generated by large language model products.".
In January of this year, the FTC issued an investigation order to five companies, requesting them to provide information on recent investments and partnerships between generative AI companies and major cloud service providers. These five companies include Google's parent company Alphabet, Amazon, Microsoft, as well as OpenAI and Aerospace PBC.
On the other hand, the US Department of Justice is also actively targeting major technology giants. Last January, the US Department of Justice filed an antitrust lawsuit against Google over its alleged monopoly on digital advertising technology. In March of this year, the US Department of Justice, together with the Attorney General of over a dozen states and regions, filed a civil antitrust lawsuit against Apple, accusing it of monopolizing or attempting to monopolize the smartphone market. In May of this year, sources revealed that prosecutors from the US Department of Justice were investigating Tesla to determine whether it had misled investors and consumers about its autonomous driving capabilities in electric vehicles.
However, in terms of AI regulation, the United States still lags behind Europe. In May of this year, the European Council officially approved the Artificial Intelligence Act. Like many other EU regulations, the Artificial Intelligence Act was originally intended to legislate for consumer safety, with its core feature being the classification of risk levels for AI applications into "unacceptable" risk, high risk, medium risk, and low risk.
FTC Chairman Lina Khan stated in an interview in February this year that the FTC hopes to detect and control issues with AI when they first arise, "rather than taking action years later when problems become deeply ingrained and difficult to correct.".
As the most prominent winners in the AI craze, Nvidia, OpenAI, and Microsoft have also been questioned for their dominant position.
Just before the news came out, on June 5th local time, Nvidia (Nasdaq: NVDA) rose 5.16%, hitting a new historical high for three consecutive trading days, with a total market value of $3.01 trillion, surpassing Apple and becoming a giant second only to Microsoft ($3.15 trillion). It is also the third company in history to break through the $3 trillion market value barrier. Even more exaggerated is that Nvidia's market value rose from $2 trillion to $3 trillion in just about three months.
Sources say that industry insiders are increasingly concerned about the potential monopoly form that Nvidia's dominant position may bring, including how the company's software can "lock in" customers using its chips, and how Nvidia can distribute these chips to customers.
The partnership between Microsoft and OpenAI has also been closely monitored by global regulatory agencies for a long time. In order to maintain its leading position in the AI wave, Microsoft has invested over $13 billion in OpenAI, holding a 49% stake in the latter and fully integrating its technology into its products. However, in April of this year, the European Commission decided not to conduct a formal investigation into the cooperation between the two companies, as the cooperation did not constitute an acquisition and Microsoft did not control the development direction of OpenAI.
In addition, in March of this year, just after leading the latest round of financing for AI startup Infection, Microsoft poached two co founders and some employees from Infection. According to insiders, Microsoft has paid over $650 million to Infection for this. Industry insiders point out that due to not being a standard transaction, Microsoft's approach is more difficult to be reviewed by regulatory authorities.
In a public speech a week ago, Jonathan Kanter, the head of the antitrust department at the US Department of Justice, stated that "the structure and trends in AI should raise our vigilance": "AI relies on a large amount of data and computing power, which may give companies that already dominate a huge advantage."